U.S. semiconductor giant Qualcomm has settled a dispute with China’s largest telecommunications equipment maker Huawei Technologies. They settled over patent fees through reconciliation, according to the report by the Wall Street Journal.
According to the media, Qualcomm announced on the previous day that it had compromised with Huawei. On the condition that it would pay $1.8 billion for the use of patents from the July-September 2020 quarter.
Qualcomm’s stock price temporarily jumped 14 percent in after-hours trading on the 29th along with the settlement of patent disputes that have continued since 2017.
Qualcomm made the announcement in its April-June quarterly statement. As a result, Huawei will resume payment of patent fees that have been suspended since 2017.
“With the signing of the Huawei agreement we are now entering a period in which we have multiyear license agreements with every major handset OEM,” Steve Mollenkopf, Qualcomm chief executive, said on the conference call.
Qualcomm has already stopped supplying semiconductors to Huawei
This is due to the Donald Trump administration’s all-out pressure on Huawei. However, the U.S. government’s sanctions would not affect the recently reconciled license contract.
Qualcomm also had a dispute with Apple over smartphone-related patent fees, but made up with Apple in April last year.
Meanwhile, sales in the April-June quarter, which was unveiled by Qualcomm, recorded $4.89 billion. And net profit of $845 million.
The April-June 2019 quarter saw sales and net profits drop 49 percent and 61 percent, respectively, from a year earlier, as special revenues of $4.7 billion came in as the company reconciled with Apple.
Shipments of semiconductors for smartphones dropped 17 percent to 130 million in the wake of the COVID-19 outbreak. The number of shipments in the July-September period is around 145 million to 165 million.
Following the U.S. sanction, U.K. and France have excluded Huawei tech from the countries’ 5G development. Recetly, Japan has also banned Chinese apps such as TikTok.
